BUCHAREST, Oct 25 (Reuters) - Markets have made a tough call on the value of Romanian state assets and the government will have to scale down its ambitious price targets if it wants to keep its privatisation programme on track.

When Romania completed a 20 billion euro International Monetary Fund-led bailout and struck a new deal earlier this year, it committed to sell stakes in a host of companies to improve efficiency and bring down its budget gap.

The government did not put a specific target on how much it wanted to raise and has been knocked off course by concerns about job losses and opposition accusations that selling off the family silver could damage the government's popularity before a 2012 general election.

Companies like oil and gas group Petrom , power grid operator Transelectrica or gas grid operator Transgaz may offer good returns -- analysts' average target price for Petrom, for example, is a third higher than its current price.

However, investors, bankers and analysts say the big problem is the image of the Romanian state -- inflexible, inefficient and reluctant to accept unpalatable verdicts from markets and advisors.

"If the situation stays as it is now, nothing significant is going to happen -- it's just a lot of paper shuffling," said Matei Paun, managing director at investment bank BAC.

The government did try to sell a stake in Petrom, probably its top asset, in July. But its timing could not have been worse as Europe's debt crisis sent markets sliding and it set a price that was far too high, at 0.46 lei per share when Petrom shares were trading at just 0.38 lei.

The government nonetheless made positive noises until the last moment before the sale fell through, which did little for its credibility.

Romania has lagged countries like Poland and Russia in selling state assets to boost public finances, attract investment and inject foreign expertise into moribund local industries. Even Bulgaria -- long criticised for holding on to state assets -- finally managed to offload cigarette maker Bulgartabak last month, to a unit of Russia's VTB Bank , after years of false starts.

Rusting hulks of factories litter the edges of Bucharest and other cities, some operating part-time, others shut down. The state sector is a millstone on public finances with 1.2 million workers, nearly a third of total employees.

The IMF says state-owned companies owe some 20 billion lei($6.4 billion), or 4 percent of GDP, to private firms and to the state, a serious obstacle to the government's aim of cutting the budget deficit to 3 percent of gross domestic product in 2012, from a targeted 4.4 percent this year.

"I think it's important that everyone recognises that the key to sustainable growth in the medium and long term in Romania is to fix the problems in these companies," the IMF's Romania mission chief Jeffrey Franks told Reuters.

"There is no room for slacking off just because the macroeconomic situation is more difficult or because there are elections coming up."

Bucharest insists it is pushing ahead with deals, but it still has no sale to prove its intent and received just one bid from local brokers this month to advise on the sale of a stake in Transelectrica.

Valentin Ionescu, head of the Bucharest stock exchange, admitted last week there is too little time to conclude a deal for a Transgaz stake this year and there will be problems with other sales.

Offloading unlisted companies such as airline Tarom and railway freight carrier CFR Marfa will be more difficult as they do not have the same exposure and transparency.

"One of the risks is that the general perception of getting stuff away in Romania is difficult," said Guy Burrow, a partner at consultancy Candole. "There is never a good time, only the right price. How long do you keep waiting?"

SHUNNING ADVICE

Bankers said the government could have netted 1.9 billion lei from the Petrom sale but it refused to sell for less than 2.1 billion.

Petrom shares have since lost more than 20 percent and it is unlikely to fetch the same price if and when it goes on the block again in 2012.

"I think the lesson from this one is that they really have to listen to the advisers they choose," Grzegorz Konieczny, who runs Fondul Proprietatea , which has a 20 percent stake in Petrom, told Reuters after the sale fell through.

"The bigger the banks that will participate the better, with a proper track record in the region," said Konieczny. His fund, set up to compensate Romanians whose assets were seized under communism and with assets of 3.4 billion euros, holds stakes in dozens of other Romanian companies including major energy firms.

Konieczny's boss Mark Mobius, one of the world's best-known emerging market investors, weighed in this month to criticise a 400 million lei donation by state-owned Romgaz -- in which Fondul owns 15 percent -- to the state budget.

"Romania cannot afford to fall behind, as it has a lot of competition from other emerging countries that are truly committed to attracting foreign investment," Mobius said. ($1 = 3.113 Romanian lei) (Additional reporting by Luiza Ilie; Editing by Susan Fenton)